Oilseed groups concerned with EU energy directives

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Trade reports indicate that, since the RED was implemented by Germany on Jan. 1, 2011, U.S. soybean exports to that country have declined significantly, and soybean oil processed in the EU from U.S. soybeans is being re-exported out of the EU.

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The American Soybean Association (ASA), joined by other U.S. oilseed producer and industry organizations, has expressed serious concerns to U.S. Department of Agriculture (USDA) Secretary Tom Vilsack and U.S. Trade Representative (USTR) Ron Kirk about the requirements of the European Union’s (EU) Renewable Energy Directive (RED), and with the impact the RED is having on access for U.S. agricultural products to EU markets.

In a letter delivered to Secretary Vilsack and Ambassador Kirk March 9, the group is requesting a meeting with USDA and USTR to consider options for responding to trade barriers resulting from and influenced by the RED. The letter asks USDA and USTR to place an immediate priority on seeking to initiate bilateral negotiations between governments.

Further, the group asks USDA and USTR to communicate with third country governments regarding the implications of and needed response to the RED. ASA believes a highly coordinated effort is needed to identify and respond to the immediate, as well as longer-term, market threats resulting from RED implementation.

“Trade reports indicate that, since the RED was implemented by Germany on Jan. 1, 2011, U.S. soybean exports to that country have declined significantly, and soybean oil processed in the EU from U.S. soybeans is being re-exported out of the EU,” said ASA First Vice-President Steve Wellman, a soybean producer from Syracuse, Neb. “As other Member States transpose the RED into national law, ASA anticipates the economic viability of exporting U.S. soybeans to the EU will be further eroded, and that a $1 billion market could be lost.”

In order for biofuels to qualify for EU tax credits and use mandates, the RED requires that biofuel feedstocks must reduce greenhouse gas emissions by a minimum of 35 percent by 2013, and by 50 percent by 2017, compared to petroleum diesel. Based on Brazilian production and transportation data, the EU set the greenhouse gas savings default value for soy biodiesel at 31 percent, short of the 35 percent reduction required. This disqualifies soy as a feedstock for biodiesel.